Stocks Snap Five-Week Winning Streak - U.S. Commentary

(RTTNews) - After coming under pressure early in the session, stocks regained ground over the course of the trading day on Thursday. The major averages climbed well off their worst levels before ending the session on opposite sides of the unchanged line.

While the S&P 500 edged down 0.77 points or less than a tenth of a percent to 2,035.94, the Dow crept up 13.14 points or 0.1 percent to 17,515.73 and the Nasdaq inched up 4.64 points or 0.1 percent to 4,773.50.

For the holiday-shortened week, the major averages all moved moderately lower, ending a five-week winning streak. The S&P 500 slid by 0.7 percent, while the Dow and the Nasdaq both fell by 0.5 percent.

Profit taking contributed to the initial weakness on Wall Street along with concerns about the outlook for interest rates following comments from St. Louis Federal Reserve President James Bullard.

Bullard said the relatively minor downgrades to the Fed's economic outlook suggest the next rate hike "may not be far off provided that the economy evolves as expected."

A decrease by the price of crude oil also weighed on the markets in early trading, with crude for May delivery falling as low as $38.33 a barrel.

However, a recovery attempt by the price of crude oil contributed to the subsequent rebound by the stock markets.

Crude oil for May delivery climbed well off its lows for the session but still ended the day down $0.33 at $39.46 a barrel.

Trading activity on the day was somewhat subdued, as some traders looked to get a head start on the long Easter weekend.

On the U.S. economic front, the Labor Department released a report this morning showing a modest increase in initial jobless claims in the week ended March 19th.

The Labor Department said initial jobless claims edged up to 265,000, an increase of 6,000 from the previous week's downwardly revised level of 259,000.

Economists had expected jobless claims to inch up to 268,000 from the 265,000 originally reported for the previous week.

A separate report from the Commerce Department showed a pullback in durable goods orders in the month of February.

The Commerce Department said durable goods orders fell by 2.8 percent in February after surging up by a revised 4.2 percent in January. Economists had expected durable goods orders to drop by 3.0 percent.

Excluding orders for transportation equipment, durable goods orders slid by 1.0 percent in February after climbing by 1.2 percent in January. Ex-transportation orders had been expected to dip by 0.2 percent.

Sector News

Many of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Steel stocks showed a substantial move to the upside, however, with the NYSE Arca Steel Index surging up by 2.1 percent. Cliffs Natural Resources (CLF) helped to lead the sector higher, jumping by 8.4 percent.

Considerable strength was also visible among gold stocks, as reflected by the 2 percent gain posted by the NYSE Arca Gold Bugs Index. The index partly offset the 7.4 percent loss posted on Wednesday despite a modest decrease by the price of gold.

On the other hand, airline stocks remained stuck firmly in negative territory, resulting in a 1.4 percent drop by the NYSE Arca Airline Index. With the loss, the index pulled back further off the nearly three-month closing high set on Monday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index fell by 0.6 percent, while Hong Kong's Hang Seng Index tumbled by 1.3 percent.

The major European markets also came under pressure on the day. While the French CAC 40 Index plunged by 2.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index tumbled by 1.7 percent and 1.5 percent, respectively.

In the bond market, treasuries turned lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.5 basis points to 1.90 percent after hitting a low of 1.853 percent.

Looking Ahead

Following the long Easter weekend, next week's trading is likely to be impacted by some key economic data, including the monthly jobs report due next Friday.

Traders are also likely to keep an eye on remarks by Federal Reserve Chair Janet Yellen, who is scheduled to deliver a speech next Tuesday to the Economic Club of New York.